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-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P39qre+z1Vg9v4jRaTlyICcalTxPwBrvjhJiRLDAhNfcgl0skBa8QXs2oYSwYcu9 NCNNfj7ytYxdG4IEduL/lQ== 0000950152-07-002495.txt : 20070323 0000950152-07-002495.hdr.sgml : 20070323 20070323135230 ACCESSION NUMBER: 0000950152-07-002495 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20070322 ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070323 DATE AS OF CHANGE: 20070323 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NACCO INDUSTRIES INC CENTRAL INDEX KEY: 0000789933 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL TRUCKS TRACTORS TRAILERS & STACKERS [3537] IRS NUMBER: 341505819 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09172 FILM NUMBER: 07714780 BUSINESS ADDRESS: STREET 1: 5875 LANDERBROOK DR CITY: MAYFIELD HEIGHTS STATE: OH ZIP: 44124-4017 BUSINESS PHONE: 4404499668 MAIL ADDRESS: STREET 1: 5875 LANDERBROOK DR CITY: MAYFIELD HEIGHTS STATE: OH ZIP: 44124 8-K 1 l25335ae8vk.htm NACCO INDUSTRIES, INC. 8-K e8vk

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 22, 2007

NACCO Industries, Inc.

(Exact name of registrant as specified in its charter)


Delaware	1-9172	34-1505819

(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5875 Landerbrook Drive
Cleveland, Ohio		44124-4017

(Address of principal executive offices)		(Zip Code)

(440) 449-9600

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS


Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 9.01 Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 10.4
Exhibit 10.5
Exhibit 10.6
Exhibit 10.7

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 22, 2007, the Compensation Committees of the Board of Directors of NACCO Industries, Inc., which is referred to as NACCO, and its wholly owned subsidiaries, Hamilton Beach/Proctor-Silex, Inc., which is referred to as HB/PS, NACCO Materials Handling Group, Inc., which is referred to as NMHG, The Kitchen Collection, Inc., which is referred to as KCI, and The North American Coal Corporation, which is referred to as NA Coal, each adopted a 2007 Annual Incentive Compensation Plan, which are respectively referred to as the NACCO Annual Incentive Plan, the HB/PS Annual Incentive Plan, the NMHG Annual Incentive Plan, the KCI Annual Incentive Plan and the NA Coal Annual Incentive Plan and are collectively referred to as the Annual Incentive Plans, for the benefit of certain of their respective executive and management employees. Additionally, performance criteria were established for the Annual Incentive Plans and the NACCO Industries, Inc. Supplemental Annual Incentive Compensation Plan, which is referred to as the NACCO Supplemental Plan.

The Annual Incentive Plans and the NACCO Supplemental Plan provide that each participant is eligible to earn a target incentive award during the award term of January 1, 2007 through December 31, 2007. Final awards for each individual under the Annual Incentive Plans and the NACCO Supplemental Plan are based on the participant’s target award measured against established performance criteria and performance by the participant against individual goals for the January 1, 2007 through December 31, 2007 performance period. The Compensation Committee of the Board of Directors of each of NACCO, HB/PS, NMHG, KCI and NA Coal, which are collectively referred to as the Compensation Committees, in its discretion, may also increase or decrease awards under its respective company’s Annual Incentive Plan and may approve the payment of awards where performance would otherwise not meet the minimum criteria set for payment of awards. Under the NACCO Supplemental Plan, however, there are no individual performance goals and the awards that are payable to the named executive officers under the NACCO Supplemental Plan may only be decreased. Awards under the Annual Incentive Plans and the NACCO Supplemental Plan generally range from 0% to 150% of the participant’s target award amount.

For 2007, the performance criteria under the Annual Incentive Plans and the NACCO Supplemental Plan are as follows:


Name of Plan		Performance Criteria
NACCO Annual Incentive Plan		NACCO’s consolidated return on total capital employed, which is referred to as ROTCE, for participants who are not named executive officers, and the performance criteria other than ROTCE that the Compensation Committees establish under the annual incentive plans for NACCO’s subsidiaries

NACCO Supplemental Plan		NACCO’s consolidated ROTCE (for the participants who are named executive officers)

HB/PS Annual Incentive Plan		HB/PS’s ROTCE, net income and revenue

NMHG Annual Incentive Plan		NMHG’s ROTCE, net income and market share

KCI Annual Incentive Plan		KCI’s ROTCE, net income and sales development

NA Coal Annual Incentive Plan		NA Coal’s economic value income, net income and support costs

Final incentive awards under the Annual Incentive Plans and the NACCO Supplemental Plan will be determined by the respective Compensation Committees following December 31, 2007. Final awards will be paid in cash to participants no later than March 15, 2008.

Also on March 22, 2007, the NACCO Compensation Committee established performance criteria for the NACCO Industries, Inc. Executive Long-Term Incentive Compensation Plan, which is referred to as the NACCO LTIP. The performance criteria under the NACCO LTIP for awards granted after the conclusion of the specified performance periods are as follows:

	•		Base Period Awards: NACCO’s consolidated ROTCE for the January 1, 2007 through December 31, 2007 performance period; and

	•		Consistent Performance Awards: NACCO’s consolidated ROTCE for the January 1, 2007 through December 31, 2011 performance period.

Generally, base period award payments will not exceed 150% of the target base period award. The amount of a consistent performance award payout, if any, would be determined under a formula established at the beginning of the five-year performance period that multiplies the participant’s base period award by a consistent performance factor of up to 50%, based on the amount that NACCO’s average consolidated ROTCE performance over the five-year performance period exceeds the consolidated ROTCE target for the period. This amount would then be adjusted by a factor to adjust for inflation over the performance period.

Final incentive awards under the NACCO LTIP will be determined by the NACCO Compensation Committee following the end of the applicable performance period. Final awards will be paid to participants no later than 2-1/2 months after the end of a performance period. Approximately 30% to 35% of the awards will be paid in cash, with the remaining 60% to 65% being paid in the form of shares of NACCO Class A Common Stock, which is subject to transfer restrictions generally for a period of ten years from the grant date.

Also on March 22, 2007, the Compensation Committees established performance criteria for the Hamilton Beach/Proctor-Silex, Inc. Long-Term Incentive Compensation Plan, which is referred to as the HB/PS LTIP, the NACCO Materials Handling Group, Inc. Long-Term Incentive Compensation Plan, which is referred to as the NMHG LTIP, and The Kitchen Collection, Inc. Long-Term Incentive Compensation Plan, which is referred to as the KCI LTIP, and which are collectively referred to as the Subsidiary LTIPs. For 2007, participants are eligible to earn a target long-term incentive award during the performance period of January 1, 2007 through December 31, 2007. Final awards for participants under the Subsidiary LTIPs are based on the participants’ target awards measured against the following performance criteria for the January 1, 2007 through December 31, 2007 performance period:

	•		HB/PS LTIP: HB/PS’ ROTCE;

	•		NMHG LTIP: NMHG’s ROTCE; and

	•		KCI LTIP: KCI’s ROTCE.

The Annual Incentive Plans described above and the amended form of award agreement for each of the NMHG LTIP and KCI LTIP are attached to this Current Report on Form 8-K as Exhibits 10.1 through 10.7 and are hereby incorporated herein by reference. The foregoing summary of the Annual

Incentive Plans is qualified in its entirety by reference to the full text of such plans, which are attached hereto as Exhibits 10.1, 10.2, 10.3, 10.5 and 10.7.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


Exhibit No.		Exhibit Description

10.1		NACCO Industries, Inc. 2007 Annual Incentive Compensation Plan

10.2		The Hamilton Beach/Proctor-Silex, Inc. 2007 Annual Incentive Compensation Plan

10.3		The NACCO Materials Handling Group, Inc. 2007 Annual Incentive Compensation Plan

10.4		Form award certificate for the NACCO Materials Handling Group, Inc. Long-Term Incentive Compensation Plan (As Amended and Restated as of January 1, 2006)

10.5		The Kitchen Collection, Inc. 2007 Annual Incentive Compensation Plan

10.6		Form award certificate for The Kitchen Collection, Inc. Long-Term Incentive Compensation Plan (As Amended and Restated as of January 1, 2005)

10.7		The North American Coal Corporation 2007 Annual Incentive Compensation Plan

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		NACCO INDUSTRIES, INC.

		By:		/s/ Kenneth C. Schilling

		Name: Kenneth C. Schilling
		Title: Vice President and Controller

Date: March 23, 2007

EXHIBIT INDEX


Exhibit No.		Exhibit Description

10.1		NACCO Industries, Inc. 2007 Annual Incentive Compensation Plan

10.2		The Hamilton Beach/Proctor-Silex, Inc. 2007 Annual Incentive Compensation Plan

10.3		The NACCO Materials Handling Group, Inc. 2007 Annual Incentive Compensation Plan

10.4		Form award certificate for the NACCO Materials Handling Group, Inc. Long-Term Incentive Compensation Plan (As Amended and Restated as of January 1, 2006)

10.5		The Kitchen Collection, Inc. 2007 Annual Incentive Compensation Plan

10.6		Form award certificate for The Kitchen Collection, Inc. Long-Term Incentive Compensation Plan (As Amended and Restated as of January 1, 2005)

10.7		The North American Coal Corporation 2007 Annual Incentive Compensation Plan

EX-10.1 2 l25335aexv10w1.htm EXHIBIT 10.1 exv10w1

EXHIBIT 10.1

NACCO INDUSTRIES, INC.
2007 ANNUAL INCENTIVE COMPENSATION PLAN

1. Purpose of the Plan

The purpose of the NACCO Industries, Inc. 2007 Annual Incentive Compensation Plan (the “Plan”) is to further the profits and growth of NACCO Industries, Inc. (the “Company”) by enabling the Company to attract and retain key employees of the Company by offering annual incentive compensation to those key employees who will be in a position to help the Company to meet its financial and business objectives.

2. Definitions

(a) “Award” means cash paid to a Participant under the Plan for the Award Term in an amount determined in accordance with Section 4. A Participant’s Award shall be equal to the sum of his 40% Award and his 60% Award, as further described in Section 4.

(b) “Award Term” means the period from January 1, 2007 through December 31, 2007.

(c) “60% Base Amount” means for any Participant a dollar amount, which shall be equal to the salary midpoint for the Salary Points assigned to the Participant by the Committee for the Award Term multiplied by 60% of the short-term incentive compensation target percent for those Salary Points. Attached hereto as Exhibit A is a schedule listing the 60% Base Amount for each Participant for the Award Term.

(d) “40% Base Amount” means for any Participant a dollar amount, which shall be equal to the salary midpoint for the Salary Points assigned to the Participant by the Committee for the Award Term multiplied by 40% of the short-term incentive compensation target percent for those Salary Points. Attached hereto as Exhibit B is a schedule listing the 40% Base Amount for each Participant for the Award Term. Where applicable, the 40% Base Amount and the 60% Base Amount shall be referred to herein collectively as the “Base Amount(s).”

(e) “Committee” means the Compensation Committee of the Company’s Board of Directors or any other committee appointed by the Company’s Board of Directors to administer this Plan in accordance with Section 3, so long as any such committee consists of not less than two directors of the Company and so long as each member of the Committee is not an employee of the Company or any of its subsidiaries.

(f) “Participant” means any person who is classified by the Company as a salaried employee, who in the judgment of the Committee occupies a key position in which his efforts may significantly contribute to the profits or growth of the Company; provided, however, that the Committee may select any employee who is expected to contribute, or who has contributed, significantly to the Company’s profitability to participate in the Plan and receive an Award hereunder; and further provided, however, that following the end of the Award Term the Committee may make one or more discretionary Awards to employees of the Company who were not previously designated as Participants. Directors of the Company who are also employees of the Company are eligible to participate in the Plan. Employees of the Company’s subsidiaries shall not be eligible to participate in the Plan. The Committee shall have the power to add Participants at any later date in the Award Term if individuals subsequently become eligible to participate in the Plan. Each Participant shall be notified that he is eligible to receive a 60% Award and or a 40% Award for the Award Term and the amount of his Base Amounts. If a Participant receives a change in Salary Points, salary midpoint and/or short-term incentive compensation target percent, such change and any resulting change in his Base Amount(s) will be reflected on an amended Exhibit A or Exhibit B, as applicable. Unless otherwise determined by the Committee, a Participant must be both employed by the Company and a Participant on December 31 of the Award Term, and the amount of any Award to a Participant who was not also employed by the Company and a Participant on the first day of

the Award Term shall be not more than the pro-rated amount based upon the number of days actually employed by the Company in the Award Term. Attached hereto as Exhibit A is a schedule listing the Participants eligible for a 60% Award for the Award Term and attached hereto as Exhibit B is a schedule listing the Participants eligible for a 40% Award for the Award Term.

(g) “Salary Points” means the salary points assigned to a Participant by the Committee pursuant to the Hay salary point system, or any successor salary point system adopted by the Committee.

(h) “Supplemental Plan” means the NACCO Industries, Inc. Supplemental Annual Incentive Compensation Plan.

3. Administration

This Plan shall be administered by the Committee. The Committee shall have complete authority to interpret all provisions of this Plan consistent with law, to prescribe the form of any instrument evidencing any Award granted or paid under this Plan, to adopt, amend and rescind general and special rules and regulations for its administration, and to make all other determinations necessary or advisable for the administration of this Plan. A majority of the Committee shall constitute a quorum, and the action of members of the Committee present at any meeting at which a quorum is present or acts unanimously approved in writing, shall be the act of the Committee. All acts and decisions of the Committee with respect to any questions arising in connection with the administration and interpretation of this Plan, including the severability of any or all of the provisions hereof, shall be conclusive, final and binding upon the Company and all present and former Participants, all other employees of the Company, and their respective descendants, successors and assigns. No member of the Committee shall be liable for any such act or decision made in good faith.

4. Awards

The Committee may, from time to time and upon such conditions as it may determine, authorize Awards for Participants, which Awards shall be not inconsistent with, and shall be subject to all of the requirements of, the following provisions:

(a) Performance Targets. The Committee shall determine performance target descriptions, weightings and targets for the Award Term. The targets applicable to the 60% Awards shall be attached hereto as Exhibit C. and the targets for the 40% Awards shall be attached hereto as Exhibit D. The Committee shall have the power to add, delete and amend target descriptions, weightings and targets during or after the Award Term, which shall be reflected on an amended Exhibit C or Exhibit D, as applicable. No performance targets used in this Plan which are applicable to a Participant hereunder shall be used in the Supplemental Plan in the same year for such Participant.

(b) 60% Awards. Following the end of the Award Term, the Committee shall compare the actual performance against the performance targets for each of the performance target descriptions in Exhibit C which are applicable to the 60% Awards. Based thereupon, the Committee shall determine the total payout percentage under the Plan for the 60% Awards (the “60% Payout Percentage”). The Committee shall then determine the 60% Award for each Participant, which shall be equal to the Participant’s 60% Base Amount, multiplied by the 60% Payout Percentage, and further adjusted by such other factors, including an individual performance factor for each Participant, as the Committee shall determine are appropriate; provided, however, that no 60% Award may be made to any Participant which exceeds 150% of his 60% Base Amount.

(d) Payment Provisions. Promptly following the approval of the final Awards, the Company shall pay the amount of such Awards to the Participants in cash, subject to all withholdings and

deductions pursuant to Section 5; provided, however, that (i) no Award shall be payable to a Participant except as determined by the Committee and (ii) in no event shall the Awards be paid later than two and one-half months after the close of the Award Term.

5. Withholding Taxes

Any Award paid to a Participant under this Plan, shall be subject to all applicable federal, state and local income tax, social security and other standard withholdings and deductions.

6. Amendment and Termination

The Committee may alter or amend this Plan (including the Exhibits hereto) from time to time or terminate it in its entirety; provided, however, that no such action shall, without the consent of a Participant, affect the rights in an outstanding Award of such Participant.

7. General Provisions

(a) No Right of Employment. Neither the adoption or operation of this Plan, nor any document describing or referring to this Plan, or any part thereof, shall confer upon any employee any right to continue in the employ of the Company, or shall in any way affect the right and power of the Company to terminate the employment of any employee at any time with or without assigning a reason therefor to the same extent as the Company might have done if this Plan had not been adopted.

(b) Governing Law. The provisions of this Plan shall be governed by and construed in accordance with the laws of the State of Delaware.

(c) Miscellaneous. Headings are given to the sections of this Plan solely as a convenience to facilitate reference. Such headings, numbering and paragraphing shall not in any case be deemed in any way material or relevant to the construction of this Plan or any provisions thereof. The use of the masculine gender shall also include within its meaning the feminine. The use of the singular shall also include within its meaning the plural, and vice versa.

(d) American Jobs Creation Act. It is intended that this Plan be exempt from the requirements of Section 409A of the Internal Revenue Code, as enacted by the American Jobs Creation Act.

(e) Limitation on Rights of Participants; No trust. No trust has been created by the Company for the payment of Awards granted under this Plan; nor have the Participants been granted any lien on any assets of the Company to secure payment of such benefits. This Plan represents only an unfunded, unsecured promise to pay by the Company, and the Participants hereunder are unsecured creditors of the Company.

(f) Payment to Guardian. If an Award is payable to a minor, to a person declared incompetent or to a person incapable of handling the disposition of his property, the Committee may direct payment of such Award to the guardian, legal representative or person having the care and custody of such minor, incompetent or person. The Committee may require such proof of incompetency, minority, incapacity or guardianship as it may deem appropriate prior to the distribution of such Award. Such distribution shall completely discharge the Company from all liability with respect to such Award.

8. Effective Date

This Plan shall become effective as of January 1, 2007.

EX-10.2 3 l25335aexv10w2.htm EXHIBIT 10.2 exv10w2

EXHIBIT 10.2

HAMILTON BEACH/PROCTOR-SILEX
Annual Incentive Compensation Plan — 2007

Introduction

Hamilton Beach/Proctor-Silex, Inc. (the “Company”) has established an Annual Incentive Compensation Plan (the “Plan”) as part of a competitive compensation program for the officers and key management employees of the Employers (as defined below). This Plan is also referred to as the Short-Term Incentive Compensation Plan.

Plan Objective

The Employers desire to attract and retain talented employees to enable the Employers to meet their financial and business objectives. The objective of the Plan is to provide an opportunity to earn annual incentive compensation to those employees whose performance has a significant impact on the Company’s short-term and long-term profitability.

Administration

The Plan is administered by the Committee of the Board of Directors of the Company (the “Committee”). The Committee:

a.		May amend, modify, or discontinue the Plan.

b.		Will designate Plan Participants.

c.		Will determine the annual performance criteria which generates the incentive compensation pool.

d.		Will determine the total amount of both the target and actual annual incentive compensation pool.

e.		Will approve individual incentive compensation Awards to Participants who are officers and employees above Hay Salary Job Grade 17.

f.		May delegate to the Chief Executive Officer of the Company the power to approve incentive compensation Awards to Participants in and below Hay Salary Job Grade 17.

g.		Except as determined by the Committee, a Participant must be employed on December 31 of the Award Term in order to be entitled to receive an Award hereunder. Notwithstanding the foregoing, the Committee may approve a pro rata incentive compensation Award for Participants who terminate employment prior to December 31 of the Award Term, provided those Participants were actively at work for 90 days in the Award Term and whose employment is terminated (1) due to death, Disability, Retirement or Facility Closure or Partial Closure or (2) under other circumstances at the recommendation of the Chief Executive Officer of the Company.

The Committee shall have complete authority to interpret all provisions of this Plan consistent with law, to prescribe the form of any instrument evidencing any Award granted or paid under this Plan, to adopt, amend and rescind general and special rules and regulations for its administration, and to make all other determinations necessary or advisable for the administration of this Plan. A majority of the Committee shall constitute a quorum, and the action of members of the Committee present at any meeting at which a quorum is present or acts unanimously approved in writing, shall be the act of the Committee. All acts and decisions of the Committee with respect to any questions arising in connection with the administration and interpretation of this Plan, including the severability of any or all of the provisions hereof, shall be conclusive, final and binding upon the Employers and all present and former Participants and employees and their respective descendants, successors and assigns. No member of the Committee shall be liable for any such act or decision made in good faith.

Determination of Corporate Incentive Compensation Pool

Each Participant in the Plan will have an individual target incentive compensation percentage which is determined by the Participant’s Hay Salary Job Grade.

This percentage is multiplied by the midpoint of the Participant’s Hay Salary Job Grade to determine his/her individual target incentive compensation Award.

The total of the target incentive compensation Awards of all Participants equals the target corporate incentive compensation pool (the “Target Pool”). The Target Pool is approved at the beginning of each Award Term by the Committee.

The actual corporate incentive compensation pool (the “Actual Pool”) is determined as of the end of each Award Term based on the Company’s actual performance against specific criteria established in the beginning of the Award Term by the Committee. The Target Pool is adjusted upwards or downwards by corporate performance adjustment factors to determine the Actual Pool. In no event will the actual Pool exceed 150% of the Target Pool, except to the extent that the Committee elects to increase the Actual Pool by up to 10%, as described below.

Subject to the Committee’s right to amend or terminate the Plan at any time, it is the intent of the Plan that the Actual Pool, as determined above, will be the final total corporate incentive compensation pool. However, the Committee, in its sole discretion, may increase or decrease by up to 10% the Actual Pool or may approve an incentive compensation pool where there would normally be no pool due to Company performance which is below the criteria established for the Award Term.

The Actual and Target Pools exclude commission personnel such as salespersons, regional general managers, and manufacturers representatives.

Determination of Individual Incentive Compensation Awards

Hay Salary Job Grades and the corresponding target incentive percentage for each Participant in the Plan will be established at the beginning of each Award Term and approved by the Committee. Individual target incentive compensation will then be adjusted by the appropriate pool factor. Such adjusted individual incentive compensation will then be further modified based on a Participant’s performance as compared to his individual goals for the year. If a Participant’s performance during the Award Term is determined to be unsatisfactory, the Committee reserves the right to reduce the Participant’s Award for the Award Term to zero. The total of all individual incentive compensation Awards must not exceed the Actual Pool for the Award Term.

Payment Date/Taxes

Promptly following the Committee’s approval of the final Awards, the Participant’s Employer shall pay the amount of such Awards to the Participants in cash, subject to all withholdings and deductions described in the following sentence; provided, however, that (i) no Award shall be payable to a Participant except as determined by the Committee and (ii) in no event shall the Awards be paid later than two and one-half months after the close of the Award Term. Any Award paid to a Participant under this Plan shall be subject to all applicable foreign, federal, state and local income tax, social security and other standard withholdings and deductions.

Definitions

(a) “Award” means cash paid to a Participant under the Plan for the Award Term in an amount determined in accordance with the Plan.

(b) “Award Term” means the period from January 1, 2007 through December 31, 2007.

(c) “Disability” means an approved application for disability benefits under an Employer’s long term disability plan or under any applicable government program.

(d) “Employer” means the Company, Proctor-Silex Canada, Inc., Hamilton Beach/Proctor-Silex, de Mexico, S.A. de C.V. and Grupo HB/PS de Mexico.

(e) “Facility Closure or Partial Closure” means any layoff which requires a WARN Act notice in the United States or, in Mexico, any layoff of 50 or more employees.

(f) “Participant” means any person who is classified by the Employers as a salaried employee and in Hay Salary Job Grades 14 and above, who in the judgment of the Committee occupies a key position in which his efforts may significantly contribute to the profits or growth of the Company; provided, however, that the Committee may select any employee who is expected to contribute, or who has contributed, significantly to the Company’s profitability to participate in the Plan and receive an Award hereunder; and further provided, however, that following the end of the Award Term the Committee may make one or more discretionary Awards to employees of the Employers who were not previously designated as Participants. Directors of the Company who are also employees of the Company are eligible to participate in the Plan. The Committee shall have the power to add Participants at any later date in the Award Term if individuals subsequently become eligible to participate in the Plan; provided that they were first hired by an Employer prior to August 31^st of an Award Term. Each Participant shall be notified that he is eligible to receive an Award and the amount of his target Award. If a Participant receives a change in salary midpoint, such Participant shall be notified of any resulting change in his target Award. Notwithstanding the foregoing, in no event shall any person who is classified by an Employer as commissioned personnel be included as a Participant in the Plan (including, without limitation, salespersons, regional general managers and manufacturers representatives).

(g) “Retirement” means a termination of employment with the Company at or after age 60 and the completion of 10 or more years of service with the Company.

General Plan Provisions

(a) No Right of Employment. Neither the adoption or operation of this Plan, nor any document describing or referring to this Plan, or any part thereof, shall confer upon any employee any right to continue in the employ of the Employers, or shall in any way affect the right and power of an Employer to terminate the employment of any employee at any time with or without assigning a reason therefor to the same extent as the Company might have done if this Plan had not been adopted.

(b) Governing Law. The provisions of this Plan shall be governed by and construed in accordance with the laws of the State of Virginia.

(d) American Jobs Creation Act. It is intended that this Plan be exempt from the requirements of Section 409A of the Internal Revenue Code, as enacted by the American Jobs Creation Act.

(f) Payment to Guardian. If an Award is payable to a minor, to a person declared incompetent or to a person incapable of handling the disposition of his property, the Committee may direct payment of such Award to the guardian, legal representative or person having the care and custody of such minor, incompetent or person. The Committee may require such proof of incompetency, minority, incapacity or guardianship as it may deem appropriate prior to the distribution of such Award. Such distribution shall completely discharge the Employers from all liability with respect to such Award.

(g) Effective Date. This Plan shall become effective as of January 1, 2007.

2007 Performance Targets

The performance targets for the Plan are attached as an Addendum to this document.

EX-10.3 4 l25335aexv10w3.htm EXHIBIT 10.3 exv10w3

EXHIBIT 10.3

NACCO MATERIALS HANDLING GROUP, INC.
2007 ANNUAL INCENTIVE COMPENSATION PLAN

Introduction

NACCO Materials Handling Group, Inc., (the “Company”) has established an Annual Incentive Compensation Plan (“Plan”) as part of a competitive compensation program for the officers and key management employees of the Employers.

Plan Objective

Administration

The Plan is administered by the Compensation Committee of the Board of Directors of the Company (the “Committee”). The Committee:

	a.		May amend, modify or discontinue the Plan.

	b.		Will designate Plan Participants.

	c.		Will determine the annual performance criteria which generate the incentive compensation pool.

	d.		Will determine the total amount of both the target and actual annual incentive compensation pool.

	e.		Will approve individual incentive compensation Awards to Participants who are officers and employees classified above salary grade 30.

	f.		May delegate to the Chief Executive Officer of the Company the approval of incentive compensation Awards to Participants who are classified in salary grade 30 and below.

	g.		Except as determined by the Committee, a Participant must be employed on December 31 of the Award Term in order to be entitled to receive an Award hereunder. Notwithstanding the foregoing, the Committee may approve a pro-rated incentive compensation Award for Participants in the Plan whose employment is terminated (1) due to death, Disability, Retirement or facility closure or (2) under other circumstances at the recommendation of the Chief Executive Officer of the Company.

The Committee shall have complete authority to interpret all provisions of this Plan consistent with law, to prescribe the form of any instrument evidencing any Award granted or paid under this Plan, to adopt, amend and rescind general and special rules and regulations for its administration, and to make all other determinations necessary or advisable for the administration of this Plan. A majority of the Committee shall constitute a quorum, and the action of members of the Committee present at any meeting at which a quorum is present or acts unanimously approved in writing, shall be the act of the Committee. All acts and decisions of the Committee with respect to any questions arising in connection with the administration and interpretation of this Plan, including the severability of any or all of the provisions hereof, shall be conclusive, final and binding upon the Employers all present and former Participants and employees and their respective descendants, successors and assigns. No member of the Committee shall be liable for any such act or decision made in good faith.

Determination of Corporate Incentive Compensation Pool

Each Participant in the Plan will have an individual target incentive compensation percentage, which is determined by the Participant’s salary grade. This percentage is multiplied by the mid-point of the Participant’s salary grade to determine his individual target incentive compensation Award. The total of the target incentive compensation Awards of all Participants equals the target corporate incentive compensation pool (“Target Pool”). The Target Pool is approved at the beginning of each Award Term by the Committee.

The actual corporate incentive compensation pool (“Actual Pool”) is determined as of the end of each Award Term based on the Company’s actual performance against specific criteria established in the beginning of the Award Term by the Committee. The Target Pool is adjusted upwards or downwards by corporate performance adjustment factors to determine the Actual Pool. In no event will the Actual Pool exceed 150% of the Target Pool, except to the extent that the Committee elects to increase the Actual Pool by up to 10%, as described below.

The Target and Actual Pools may consist of the sum of two or more subpools, provided the subpools have individual objectives.

The Actual and Target Pools exclude the Marketing Incentive Plan for regional parts, service, sales and national account managers. However, total compensation or employees covered by the Marketing Incentive Plan will be based on competitive levels.

Determination of Individual Incentive Compensation Awards

Salary grades and the corresponding target incentive percentages for each Participant in the Plan will be established at the beginning of each Award Term and approved by the Committee. Individual target incentive compensation will then be adjusted by the appropriate pool or subpool factor. Such adjusted individual incentive compensation will then be further modified based on the team performance to which an individual belongs compared to the team goals for the Award Term, and may be further modified based on a Participant’s performance as compared to their individual goals for the Award Term.

The total of all individual incentive compensation Awards must not exceed the Actual Pool for the Year.

Below are examples of actual pool and individual Award calculations.

a. Example calculation for determination of actual pool:

Intentionally Omitted

b. Example calculation for determination of individual incentive compensation Award:

Intentionally Omitted

Payment Date/Taxes

Promptly following the Committee’s approval of the final Awards, the Participant’s Employer shall pay the amount of such Awards to the Participants in cash, subject to all withholdings and deductions described in the following sentence; provided, however, that (i) no Award shall be payable to a Participant except as determined by the Committee and (ii) in no event shall the Awards be paid later than two and one-half months after the close of the Award Term. Any Award paid to a Participant under this Plan shall be subject to all applicable federal, state and local income tax, social security and other standard withholdings and deductions.

Definitions

(a) “Award” means cash paid to a Participant under the Plan for the Award Term in an amount determined in accordance with the Plan.

(b) “Award Term” means the period from January 1, 2007 through December 31, 2007.

(c) “Disability” means an approved application for disability benefits under the Company’s long term disability plan or under any applicable government program.

(d) “Employers” mean the Company, NMHG Oregon, LLC and their Subsidiaries.

(e) “Participant” means any person who is classified by the Employers as a salaried employee and in salary grade 22 and above, who in the judgment of the Committee occupies a key position in which his efforts may significantly contribute to the profits or growth of the Employers; provided, however, that the Committee may select any employee who is expected to contribute, or who has contributed, significantly to the Employers’ profitability to participate in the Plan and receive an Award hereunder; and further provided, however, that following the end of the Award Term the Committee may make one or more discretionary Awards to employees of the Employers who were not previously designated as Participants. Directors of the Company who are also employees of the Company are eligible to participate in the Plan. The Committee shall have the power to add Participants at any later date in the Award Term if individuals subsequently become eligible to participate in the Plan; provided that they are employed by an Employer for at least 90 calendar days during the Award Term.

(f) “Retirement” means (i) the termination of a U.S. Participant’s employment with the Employers after the Participant has reached age 60 and completed at least 15 years of service with the Employers or (ii) the termination of a non-U.S. Participant’s employment with the Employers which qualifies as retirement under local practices and procedures and/or which qualifies the non-U.S. Participant for foreign retirement benefits.

General Plan Provisions

(a) No Right of Employment. Neither the adoption or operation of this Plan, nor any document describing or referring to this Plan, or any part thereof, shall confer upon any employee any right to continue in the employ of the Employers, or shall in any way affect the right and power of an Employer to terminate the employment of any employee at any time with or without assigning a reason therefor to the same extent as the Employer might have done if this Plan had not been adopted.

(b) Governing Law. The provisions of this Plan shall be governed by and construed in accordance with the laws of the State of North Carolina.

(d) American Jobs Creation Act. It is intended that this Plan be exempt from the requirements of Section 409A of the Internal Revenue Code, as enacted by the American Jobs Creation Act.

(e) Limitation on Rights of Participants; No trust. No trust has been created by the Employers for the payment of Awards granted under this Plan; nor have the Participants been granted any lien on any assets of the Employers to secure payment of such benefits. This Plan represents only an unfunded, unsecured promise to pay by the Participant’s Employer and a Participant hereunder is a mere unsecured creditor of his Employer. Notwithstanding the foregoing, in the event that NMHG Oregon, LLC is unable or refuses to satisfy its obligations hereunder with respect to the payment of Awards to or on behalf of its employees, the Company shall guarantee and be responsible for the payment thereof.

(f) Payment to Guardian. If an Award is payable to a minor, to a person declared incompetent or to a person incapable of handling the disposition of his property, the Committee may direct payment of such Award to the guardian, legal representative or person having the care and custody of such minor, incompetent or person. The Committee may require such proof of incompetency, minority, incapacity or guardianship as it may deem appropriate prior to the distribution of such Award. Such distribution shall completely discharge the Employers from all liability with respect to such Award.

(g) Effective Date. This Plan shall become effective as of January 1, 2007.

2007 Performance Targets

The performance targets for the Plan are attached as an Addendum to this document.

EX-10.4 5 l25335aexv10w4.htm EXHIBIT 10.4 exv10w4

EXHIBIT 10.4

Award Control Number: <insert #>

NACCO MATERIALS HANDLING GROUP, INC.

LONG-TERM INCENTIVE COMPENSATION AWARD

(NOT TRANSFERABLE)

Form of Award Unit CERTIFICATE

NACCO MATERIALS HANDLING GROUP, INC.

(the “Company”) pursuant to action of the Compensation
Committee of its Board of Directors (the “Committee”), hereby
grants to
<insert employee name> (the “Grantee”), <insert units>
Award Units

having a Award Unit Price $ per Unit

pursuant to and subject to the provisions of the
NACCO MATERIALS HANDLING GROUP, INC. Long-Term
Compensation Plan (the “Plan”). This Award granted

on and this Certificate executed at Portland, Oregon, as of

January 1, 20 —, the “Date of Grant”
The Award Units granted in this Certificate shall have a maturity
date of January 1, 20 — (but shall mature earlier in
accordance with Plan terms on death, disability or retirement).

Recipient acknowledges having received a complete copy of the Plan.

President and Chief Executive Officer

Please review carefully the summary of general provisions pertinent to this award on the reverse side.

Form of Award Unit Certificate
General Provisions**

1.		Vesting/Taxes: These Award Units are fully vested as of the Grant Date. As a result, they are subject to US FICA taxes when granted. (However, under current tax law, they are not subject to US Federal, state or local income taxes until paid out.) All payments under the Plan will be reduced by the amount of any employment or other taxes that are required to be withheld therefrom.

2.		Payment Restrictions: The Book Value Units granted under the Award are subject to a payment restriction for a period of five years from the Grant Date (the “Maturity Date”). However, these payment restrictions automatically lapse upon death or a Termination of Employment due to Disability or Retirement. The Committee may not accelerate the time at which such payment restrictions will lapse. In addition, the Maturity Date for certain “key employees” (generally, the top 50 paid employees across the NACCO group) will be delayed until 6 months after retirement.

3.		Payment Date / Value: Unless a Participant makes a deferral election under Section 4, as soon as practicable following the lapse of a payment restriction applicable to an Award pursuant to Section 2, the employer or former employer of the Participant will deliver to the Participant (or, if applicable, his Beneficiary), a check in full payment of the Book Value Units granted pursuant to the Award. For participants who are employed on the Maturity Date, the value of the Book Value Units is based on the Book Value as of the Quarter Date coincident with or immediately preceding the Maturity Date. For Participants who incur a Termination of Employment before the Maturity Date for reasons other than Disability or Retirement, the value of the Book Value Units is based on the Book Value as of the ending Quarter Date coincident with or immediately preceding the date of termination (despite the fact that payment is not made until Maturity Date). Finally, for Participants who die or who incur a Termination of Employment before the Maturity Date due to Disability or Retirement, the value of the Book Value Units is based on the Book Value as of the ending Quarter Date coincident with or immediately preceding the death, Disability or Retirement (or 6 months later in the case of key employees).

4.		Deferral Option: A Participant who is a citizen or resident of the United States has the ability to make an irrevocable election to defer receipt of his entire Award under the Plan. A separate deferral election must be made with respect to each Award granted under the Plan. The Awards which are subject to a deferral election continue to be subject to the terms and conditions of the Plan until the date of payment. In order to make a deferral election, the election (i) must apply to 100% of an Award granted for a particular year, (ii) must be made at least 12 months prior to the Maturity Date of the Award and (iii) will not be given effect until at least 12 months after the date on which the election is made. If a valid and timely deferral election is made with respect to an Award, the payment of the Award will automatically be deferred until the 10^th anniversary of the Grant Date of such Award and will then be paid in the form of a lump sum payment as soon as practicable after the 10^th anniversary date. Deferred Awards will be valued based on the Book Value as of the Quarter Date coincident with or immediately preceding the 10^th anniversary date. Notwithstanding the foregoing, the deferral election of a Participant who incurs a Termination of Employment on account of death or Disability shall receive a payment of the deferred Awards as soon as practicable thereafter, with the awards valued as of the Quarter Date coincident with or immediately preceding such date. A Participant who incurs a Termination of Employment for any other reason (including Retirement) shall not be entitled to receive payment for his Award until the 10^th anniversary of the Grant Date. The Awards for Participants whose Termination of Employment is on account of Retirement shall continue to be valued in accordance with the terms of the Plan until the date of payment. The Awards for these Participants shall be valued based on the Book Value as of the Quarter Date coincident with or immediately preceding the date of such Termination of Employment (despite the fact that such amounts are not paid until the 10^th anniversary of the Grant Date). The Awards are then credited with interest, at the end of each calendar month, using a rate equal to the “10_Year U.S. Treasury Yield” rate plus 2%, until the payment date.

		Assignability: This Award is not transferable for any reason whatsoever; provided, however, that upon the death of a Participant the right to the proceeds of this Award will be transferred to a Beneficiary.

		No Right of Employment: Neither the adoption or operation of the Plan, nor any document describing or referring to this Plan, or any part thereof, shall confer upon any employee any right to continue in the employ of the Company or any Subsidiary, or shall in any way affect the right and power of the Company or any Subsidiary to terminate the employment of any employee at any time with or without assigning a reason therefor to the same extent as the Company or any Subsidiary might have done if this Plan had not been adopted.

		Limitation of Rights: No trust has been created by the Company or any Subsidiary for the payment of Book Value Units granted under this Plan; nor have the grantees of Awards been granted any lien on any assets of the Company or any Subsidiary to secure payment of such benefits. This Plan represents only an unfunded, unsecured promise to pay by the Company and the Subsidiaries, and the grantees hereunder are unsecured creditors of the Company and Subsidiaries.

		**Disclaimers:

The IRS has not issued the final guidance that is needed to bring the Plan into compliance with the requirements of the American Jobs Creation Act of 2004 (the “Act”). Additional Plan amendments may be required. You will be notified if any amendments are made and, if any substantive changes are required, you will be issued a revised Certificate at that time.

Words used in this Award Certificate that are defined in the Plan are used herein as so defined. The terms of this Award are subject to all terms and conditions of the Plan document. The Company reserves the right to amend or terminate the Plan at any time.

EX-10.5 6 l25335aexv10w5.htm EXHIBIT 10.5 exv10w5

EXHIBIT 10.5

THE KITCHEN COLLECTION, INC.
2007 ANNUAL INCENTIVE COMPENSATION PLAN

Introduction

The Kitchen Collection, Inc. (“the Company”) has established an Annual Incentive Compensation Plan (“Plan”) as part of a competitive program for the officers and key management employees of the Company.

Plan Objectives

The Company desires to attract and retain talented employees to enable the Company to meet its financial and business objectives. The objective of the Plan is to provide an opportunity to earn annual incentive compensation to those employees whose performance has a significant impact on the Company’s short-term and long-term profitability.

Administration

The Plan is administered by the Compensation Committee of the Board of Directors of the Company (the “Committee”). The Committee:

	A.		May amend, modify, or discontinue the Plan.

	B.		Will designate Plan Participants.

	C.		Will determine the annual performance criteria which generate the incentive compensation pool.

	D.		Will determine the total amount of both the target and actual annual incentive compensation pool.

	E.		Will approve individual incentive Awards to Participants who are officers of the Company.

	F.		May delegate to the Chief Executive Officer of the Company the approval of incentive compensation Awards to Participants below officer level.

	G.		May approve a pro rata incentive compensation Award for Participants in the Plan whose employment is terminated before the end of the Award Term (1) due to death, disability, retirement or facility closure or (2) under other circumstances at the recommendation of the Chief Executive Officer of the Company. In furtherance of, but without limiting the foregoing, except as determined by the Committee, a Participant must be employed on December 31 of the Award Term in order to be entitled to receive an Award hereunder.

The Committee shall have complete authority to interpret all provisions of this Plan consistent with law, to prescribe the form of any instrument evidencing any Award granted or paid under this Plan, to adopt, amend and rescind general and special rules and regulations for its administration, and to make all other determinations necessary or advisable for the administration of this Plan. A majority of the Committee shall constitute a quorum, and the action of members of the Committee present at any meeting at which a quorum is present or acts unanimously approved in writing, shall be the act of the Committee. All acts and decisions of the Committee with respect to any questions arising in connection with the administration and interpretation of this Plan, including the severability of any or all of the provisions hereof, shall be conclusive, final and binding upon the Company and all present and former Participants and employees and their respective descendants, successors and assigns. No member of the Committee shall be liable for any such act or decision made in good faith.

Determination of Corporate Incentive Compensation Pool

Each Participant in the Plan will have an individual target incentive compensation percentage which is determined by the Participant’s salary grade. This percentage is multiplied by the mid-point of the Participant’s salary grade to determine his individual target incentive compensation Award. The total

of the target incentive compensation Awards of all participants equals the target corporate incentive compensation pool (“Target Pool”). The Target Pool is approved at the beginning of each Award Year by the Committee.

The actual corporate incentive compensation pool (”Actual Pool”) is determined as of the end of each Award Year based on the Company’s actual performance against specific criteria established in the beginning of the Award Year by the Committee. The Target Pool is adjusted upwards or downwards by corporate performance adjustment factors to determine the Actual Pool. In no event will the Actual Pool exceed 150% of the Target Pool, except that the Committee elects to increase the Actual Pool by up to 10% as described below.

The Target and Actual Pools may consist of the sum of two or more subpools, provided the subpools have individual objectives.

Subject to the Committee’s right to amend or terminate the Plan at any time, it is the intent of the Plan that the Actual Pool, as determined above, will be the final total corporate incentive compensation pool. However, the Committee, in its sole discretion, may increase or decrease by up to 10% of the Actual Pool or may approve an incentive compensation pool where there would normally be no pool due to Company performance which is below the criteria established for the year.

The Actual and Target Pools exclude the Marketing Incentive Plan for regional, district, store and support managers. However, total compensation for employees covered by the Marketing Incentive Plan will be based on competitive levels.

Determination of Individual Incentive Compensation Awards

Salary grades and the corresponding target incentive percentage for each Participant in the Plan will be established at the beginning of each Award Year and approved by the Committee. Individual target incentive compensation will then be adjusted by the appropriate pool or subpool factor. Such adjusted individual incentive compensation will be further modified based on a Participant’s performance as compared to his individual goals for the Award Year.

The total of all individual incentive compensation Awards must not exceed the Actual Pool for the Award Year.

	A.		Example Calculation for Determination of Actual Pool

			Intentionally Omitted

	B.		Example Calculation for Determination of Individual Incentive Compensation Awards

			Intentionally Omitted

Payment Date/Taxes

Promptly following the Committee’s approval of the final Awards, the Company shall pay the amount of such Awards to the Participants in cash, subject to all withholdings and deductions described in the following sentence; provided, however, that (i) no Award shall be payable to a Participant except as determined by the Committee and (ii) in no event shall the Awards be paid later than two and one-half months after the close of the Award Term. Any Award paid to a Participant under this Plan shall be subject to all applicable federal, state and local income tax, social security and other standard withholdings and deductions.

Definitions

(a) “Award” means cash paid to a Participant under the Plan for the Award Term in an amount determined in accordance with the Plan.

(b) “Award Term” means the period from January 1, 2007 through December 31, 2007.

(c) “Participant” means any person who is classified by the Company as a salaried employee and in salary grades 4 and above, who in the judgment of the Committee occupies a key position in which his efforts may significantly contribute to the profits or growth of the Company; provided, however, that the Committee may select any employee who is expected to contribute, or who has contributed, significantly to the Company’s profitability to participate in the Plan and receive an Award hereunder; and further provided, however, that following the end of the Award Term the Committee may make one or more discretionary Awards to employees of the Company who were not previously designated as Participants. Directors of the Company who are also employees of the Company are eligible to participate in the Plan. The Committee shall have the power to add Participants at any later date in the Award Term if individuals subsequently become eligible to participate in the Plan. Each Participant shall be notified that he is eligible to receive an Award and the amount of his target Award. If a Participant receives a change in salary midpoint, such Participant shall be notified of any resulting change in his target Award.

General Plan Provisions

(b) Governing Law. The provisions of this Plan shall be governed by and construed in accordance with the laws of the State of Ohio.

(d) American Jobs Creation Act. It is intended that this Plan be exempt from the requirements of Section 409A of the Internal Revenue Code, as enacted by the American Jobs Creation Act.

(e) Limitation on Rights of Participants; No trust. No trust has been created by the Company for the payment of Awards granted under this Plan; nor have the Participants been granted any lien on any assets of the Company to secure payment of such benefits. This Plan represents only an unfunded, unsecured promise to pay by the Company and a Participant hereunder is a mere unsecured creditor of the Company.

(g) Effective Date. This Plan shall become effective as of January 1, 2007.

2007 Performance Targets

The performance targets for the Plan are attached as an Addendum to this document.

EX-10.6 7 l25335aexv10w6.htm EXHIBIT 10.6 exv10w6

EXHIBIT 10.6

Award Control Number:
THE KITCHEN COLLECTION, INC.
LONG-TERM INCENTIVE
COMPENSATION AWARD
(NOT TRANSFERABLE)
Form of Award Unit CERTIFICATE

THE KITCHEN COLLECTION, INC.

(the “Company”) pursuant to action of the Compensation
Committee of its Board of Directors (the “Committee”),
hereby grants to
(the “Grantee”), Award Units
having an Award Unit Price $ per Unit

pursuant to and subject to the provisions of The
Kitchen Collection, Inc. Long-Term Compensation Plan (the
“Plan”). This Award granted on and this Certificate executed
at Chillicothe, OH as of

January 1, 20 — , the “Date of Grant”
The Award Units granted in this Certificate shall have a
maturity date of January 1, 20 — (but shall mature earlier in
accordance with Plan terms on death, disability or
retirement).

Recipient acknowledges having received a complete copy of the Plan.


THE KITCHEN Collection, Inc.

BY
		President and Chief Executive Officer

Please review carefully the summary of general provisions pertinent to this award on the reverse side.

Award Unit Certificate
General Provisions**

Vesting/Taxes: These Award Units are fully vested as of the Grant Date. As a result, they are subject to FICA taxes when granted. (However, under current tax law, they are not subject to federal, state or local income taxes until paid out.) All payments under the Plan will be reduced by the amount of any employment or other taxes that are required to be withheld therefrom.

Payment Restrictions: The Book Value Units granted under the Award shall be subject to a payment restriction for a period of five years from the Grant Date (the “Maturity Date”); provided that such payment restrictions automatically lapse upon a termination of employment by reason of death, Disability or Retirement. The Committee may not accelerate the time at which such payment restrictions will lapse. In addition, the Maturity Date for certain “key employees” (generally, the top 50 paid employees across the NACCO group) will be delayed until 6 months after retirement.

Payment Date / Value: Unless a Participant makes a deferral election under Paragraph 4 below, as soon as practicable following the lapse of a payment restriction applicable to an Award pursuant to Paragraph 2 above, the Company will deliver to the Participant (or, if applicable, his Beneficiary), a check in full payment of the Book Value Units granted pursuant to such Award. For Participants who are employed on the Maturity Date, the value of the Book Value Units is based on the Book Value as of the Quarter Date coinciding with or immediately preceding the Maturity Date. For Participants who terminated employment for reasons other than Disability or Retirement, the value of the Book Value Units is based on the Book Value as of the ending Quarter Date coincident with or immediately preceding the date of termination (despite the fact that payment is not made until Maturity Date). Finally, for Participants who die or who terminate employment before the Maturity Date due to Disability or Retirement, the value of the Book Value Units is based on the Book Value as of the ending Quarter Date coincident with or immediately preceding death, Disability or Retirement (or 6 months later in the case of key employees).

Deferral Option: A Participant may make an irrevocable election to defer receipt of his entire Award under the Plan. A separate deferral election must be made with respect to each Award granted under the Plan. The Awards that are subject to a deferral election continue to be subject to the terms and conditions of this Plan and shall continue to be valued in accordance with the terms of the Plan until the date of payment. In order to make a deferral election, the election (i) must apply to 100% of an Award granted for a particular year, (ii) must be made at least 12 months prior to the Maturity Date of the Award and (iii) will not be given effect until at least 12 months after the date on which the election is made. If a valid and timely deferral election is made with respect to an Award, the payment of the Award will automatically be deferred until the 10^th anniversary of the Grant Date of such Award and will then be paid in the form of a lump sum payment as soon as practicable after the 10^th anniversary date. Notwithstanding the foregoing, the deferral elections of a Participant who incurs a Termination of Employment on account of death or Disability shall receive a payment of the deferred Awards as soon as practicable thereafter, with the awards valued as of the Quarter Date coincident with or immediately preceding such date. A Participant who terminates employment for any other reason (including Retirement) shall not be entitled to receive payment for his Award until the 10^th anniversary of the Grant Date. The Awards for Participants whose Termination of Employment is on account of Retirement shall continue to be valued in accordance with the terms of the Plan until the date of payment. The Awards for Participants who incur a Termination of Employment for reasons other than death, Disability or Retirement shall be valued based on the Book Value as of the Quarter Date coincident with or immediately preceding the date of such Termination of Employment (despite the fact that such amounts are not paid until the 10^th anniversary of the Grant Date).

Assignability: This Award is not transferable for any reason whatsoever; provided, however, that upon the death of a Participant the right to the proceeds of this Award may be transferred to a Beneficiary.

No Right of Employment: Neither the adoption or operation of the Plan, nor any document describing or referring to this Plan, or any part thereof, shall confer upon any employee any right to continue in the employ of the Company, or shall in any way affect the right and power of the Company to terminate the employment of any employee at any time with or without assigning a reason therefor to the same extent as the Company might have done if this Plan had not been adopted.

Limitation of Rights: No trust has been created by the Company for the payment of Book Value Units granted under this Plan; nor have the grantees of Awards been granted any lien on any assets of the Company to secure payment of such benefits. This Plan represents only an unfunded, unsecured promise to pay by the Company, and the grantees hereunder are unsecured creditors of the Company.

**Disclaimers: The IRS has not issued the final guidance that is needed to bring the Plan into compliance with the requirements of the American Jobs Creation Act of 2004 (the “Act”). Additional Plan amendments may be required. You will be notified if any amendments are made and, if any substantive changes are required, you will be issued a revised Certificate at that time. Words used in this Award Certificate that are defined in the Plan are used herein as so defined. The terms of this Award are subject to all terms and conditions of the Plan document. The Company reserves the right to amend or terminate the Plan, in whole or in part, at any time.

EX-10.7 8 l25335aexv10w7.htm EXHIBIT 10.7 exv10w7

EXHIBIT 10.7

THE NORTH AMERICAN COAL CORPORATION
2007 ANNUAL INCENTIVE COMPENSATION PLAN

SUMMARY

This Incentive Compensation Plan (the “Plan”) offers a highly attractive incentive compensation opportunity to senior managers of The North American Coal Corporation (the “Company” or “NAC”) and its subsidiaries (the “Subsidiaries”) when specified performance objectives under their control or influence are achieved. This is accomplished through a structure containing the following elements:


n	Each Participant is assigned an individual incentive target, stated as a percentage of their base salary midpoint, that establishes the target incentive compensation Award they may receive under the Plan when performance objectives are met.

n	The individual target Award is allocated among the following performance components:

	-	North American Coal (NAC) corporate performance.
	-	Bellaire Corporation cash flow.
	-	Business unit results.
	-	Individual achievement.

n	Percentage weightings are assigned to each component, based on the Participant’s accountabilities and their impact on each component.

n	One or more performance objectives will be established at the beginning of the Award Year for each performance component.

n	A performance range, which defines the acceptable level of results, from threshold to maximum, is created for each performance objective.

n	A payout range is defined, which provides for actual incentive Award payments of up to 150 percent of the incentive target Award, except to the extent the Committee elects to increase or decrease the actual pool by up to 10 percent, as described below.

n	A performance/payout formula combines the two ranges into a matrix that defines the level of incentive compensation payment that will result from each level of performance.

n	After audited financials are available, actual Awards will be calculated based on actual results against the established objectives.

n	A final individual performance adjustment may be made, within a range of ±10 percent of the calculated Award, based on a judgment of the Participant’s overall performance.

n	All Awards will be paid in cash, within two and one-half months after the end of the Award Term.

This Incentive Compensation Plan allows management and the Committee to establish, in advance, the performance expectations and related incentive compensation potential that Plan Participants can expect for the Award Year. At the end of the Award Year, the Plan focuses judgment of the management team’s performance on predetermined objectives that should produce fairness in the determination of Awards.

PLAN STRUCTURE

Individual Incentive Targets

The primary focus of the Plan is the individual incentive compensation target Award. At the beginning of each Award Term, each Participant is assigned a target Award, stated as a percentage of the mid-point of base salary, which is payable under the Plan when all relevant performance objectives are achieved. The Plan provides for payments above or below the target Award to reflect acceptable variances from performance objectives.

Performance Goals

The following four sets of performance goals apply for the 2007 Award Term:

Intentionally Omitted

Incentive Award Range

Actual performance results attained probably will not match the established performance goals exactly. Therefore, the Plan is designed to provide incentive compensation payouts of up to 150 percent of the target Award if actual results fall within a predetermined range of acceptable performance.

The Award range is defined as follows:


	% of
Award Level	Target			Description
Maximum		150	%	Highest level of incentive paid.

Target		100	%	Competitive incentive opportunity for achieving all-important goals.

Threshold	25% to 50%			Incentive paid when results meet minimum acceptable standards.

Below threshold		0	%	Performance does not merit incentive payment.

Component Weightings

Participants’ potential incentive Awards will be allocated between performance components based on their individual impact on results. The allocations allow for Awards to be earned based on the achievement of the performance objectives over which each Participant has the most control. Weightings will be stated as a percentage and total 100 percent for each Participant. The weightings will be established at the beginning of each Award Year to reflect current organizational accountabilities and the relative importance of the various performance components. The applicable weightings for the 2007 Award Year are as follows:

Intentionally Omitted

When there is more than one goal for a performance component, further percentage weightings may be assigned, within the overall weightings, to reflect the relative priority of each goal. For

example, if the individual component has a 40 percent weighting and there are five individual goals, each individual goal might be assigned a priority weighting of 20 percent.

Performance Range

A range of performance acceptable for incentive compensation payment will be established for each performance objective. For quantitative goals, the range may be set as a percentage of the objective. For goals that cannot be quantified, the range will be defined in narrative form.

The following general definitions will apply. The percentage ranges indicated are only guidelines; specific percentage ranges or narrative descriptions will be determined for each goal based on the definitions.


	Performance
Performance	Percentage
Level	Guideline			Definition
Threshold		75	%	Minimum acceptable results justifying payment of incentives.

Objective		100	%	Results meet high performance demands justifying fully competitive rewards.

Maximum		125	%	Highest foreseeable level of performance.

Performance/Payout Formula

Combining the performance and payout ranges yields a performance/payout formula as in the following example:


Performance	Definition	Results			Award Levels	Payout
Threshold	Minimum		75	%	Threshold		50	%

Objective	On plan		100	%	Target		100	%

Maximum	Exceeding expectations		125	%	Maximum		150	%

This formula is applied separately to the results of each established performance element to determine the incentive amount earned in accordance with assigned weightings. Performance that falls between the defined levels would result in proportionally adjusted payouts, which may be calculated mathematically or determined judgmentally.

Corporate Performance Threshold

Notwithstanding any provision of the Plan to the contrary, no incentive compensation Awards will be earned under the Plan in any Award Year unless the threshold level of the corporate performance component is achieved. Once the corporate performance threshold is attained, each performance objective is separate and distinct. This means that partial Awards can be earned for the attainment of one performance objective even if another is not sufficient to generate a payout.

Individual Adjustment Factor

Each individual Award, as calculated above, may be adjusted upward or downward by as much as 10 percent of the total Award, based on management’s perceptions of each individual’s overall performance.

Partial Awards

Executives who are hired or promoted during an Award Year to positions eligible for participation in the Plan may be included in the Plan on a prorata basis (as determined by the Committee, in its sole discretion). Unless otherwise determined by the Committee, a Participant must be employed by an Employer on December 31 of the Award Term in order to be entitled to receive an Award hereunder.

Committee Discretion

It is the intent of the Plan that the total incentive compensation, as determined above, will be the final total corporate incentive compensation to be paid under the Plan. However, the Committee, in its sole discretion, may increase or decrease, by up to 10 percent, the total incentive compensation Award pool or may approve incentive compensation Award payments where normally there would be no payment, due to corporate performance which is below the criteria established for the Award Year.

This Plan shall be administered by the Committee. The Committee shall have complete authority to interpret all provisions of this Plan consistent with law, to prescribe the form of any instrument evidencing any Award granted or paid under this Plan, to adopt, amend and rescind general and special rules and regulations for its administration, and to make all other determinations necessary or advisable for the administration of this Plan. A majority of the Committee shall constitute a quorum, and the action of members of the Committee present at any meeting at which a quorum is present or acts unanimously approved in writing, shall be the act of the Committee. All acts and decisions of the Committee with respect to any questions arising in connection with the administration and interpretation of this Plan, including the severability of any or all of the provisions hereof, shall be conclusive, final and binding upon the Employers and all present and former Participants and employees and their respective descendants, successors and assigns. No member of the Committee shall be liable for any such act or decision made in good faith.

PAYMENT DATE/TAXES

DEFINITIONS

(a) “Award” means cash paid to a Participant under the Plan for the Award Term in an amount determined in accordance with the Plan.

(b) “Award Term” means the period from January 1, 2007 through December 31, 2007.

(d) “Participant” means any person who is classified by an Employer as a salaried employee, who in the judgment of the Committee occupies a key position in which his efforts may significantly contribute to the profits or growth of the Employers; provided, however, that the Committee may select any employee who is expected to contribute, or who has contributed, significantly to the Employers’ profitability to participate in the Plan and receive an Award hereunder; and further provided, however, that following the end of the Award Term the Committee may make one or more discretionary Awards to employees of the Employers who were not previously designated as Participants. Directors of the Company who are also employees of the Employers are eligible to participate in the Plan. The Committee shall have the power to add Participants at any later date in the Award Term if individuals subsequently become eligible to participate in the Plan. Each Participant shall be notified that he is eligible to receive an Award and the amount of his target Award. If a Participant receives a change in salary midpoint, such Participant shall be notified of any resulting change in his target Award.

GENERAL PLAN PROVISIONS

(a) No Right of Employment. Neither the adoption or operation of this Plan, nor any document describing or referring to this Plan, or any part thereof, shall confer upon any employee any right to continue in the employ of an Employer, or shall in any way affect the right and power of the Employer to Terminate the employment of any employee at any time with or without assigning a reason therefor to the same extent as the Employer might have done if this Plan had not been adopted.

(b) Governing Law. The provisions of this Plan shall be governed by and construed in accordance with the laws of the State of Texas.

(d) American Jobs Creation Act. It is intended that this Plan be exempt from the requirements of Section 409A of the Internal Revenue Code, as enacted by the American Jobs Creation Act.

(g) Effective Date. This Plan shall become effective as of January 1, 2007.

2007 PERFORMANCE TARGETS

The performance targets for the Plan are attached as an Addendum to this document.

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Table of Contents

Table of Contents

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